ARK Investment Management is famed for investing successful companies whose profits are years if not decades away. But adjacent the growth-focused capitalist has had its patience tested by China’s regulatory crackdown.
In a monthly concern seminar, ARK CEO Cathie Wood discussed a “valuation reset” successful the Chinese tech sector, according to Bloomberg News. “From a valuation constituent of view, these stocks person travel down and again from a valuation constituent of view, astir apt volition stay down,” she said.
On Tuesday, the ARK Innovation ETF sold $25 cardinal worthy of Tencent stock, to instrumentality its holding successful the Chinese net institution down to 0.1% of the portfolio. China’s weighting successful that money is present little than 1% from 8% successful February, and the China weighting successful the ARK Next Generation Internet ETF is the lowest since astatine slightest 2014, according to Bloomberg.
Wood is hardly the lone overseas capitalist to turn impatient with China. Global money managers successful July moved retired of China-led emerging markets by the astir of immoderate plus class, according to Bank of America’s survey.
Even successful a twelvemonth wherever the ARK Innovation ETF has struggled with performance, with the money down astir 2%, it’s inactive drawn successful $6.95 cardinal successful inflows, according to FactSet, which is the eighth highest of immoderate equities exchange-traded fund.